Nero fiddled..... - GM and Whitacre

I don't know the source of the phrase, but since a young boy I've heard "Nero fiddled while Rome burned."  The phrase was used to describe a leader who was so out of touch he was unable to do the necessary things to save his city and the people in it.  Lately, it seems like General Motors is ancient Rome.

"General Motors to launch the 'un-Dealership" is the Mediapost.com headline.  Trying to leverage auto shows, GM is going to open minimally-branded brick-and-mortar locations in 3 or 4 cities where customers can test drive Chevrolet and other cars.  The idea is that with less pressure from salespeople, customers will come use the internet cafe and hang out while occasionally test driving a car.  Then they'll be fired up to go buy a GM product.

If that isn't fiddling...... well......  When will leaders admit GM is in seriously dire trouble?  The company has lopped off complete product lines (Saturn, Hummer, Saab and Pontiac) and whacked away large numbers of dealers.  Their cars are uninteresting, and losing market share to domestic (Ford) and foreign manufacturers.  Design cycles are too long, products do not meet customer needs and competitors are zeroing in on GM customers.  Product sales, and even dealerships, are being propped up using government subsidies. The best news in the GM business has been all the troubles Toyota is having.  

During this malaise, the new GM Board agreed to appoint Ed Whitacre as the permanent CEO (see ABCnews.com article "GM Chairman Ed Whitacre Named Permanent CEO.")  Great, just what GM needed.  Another 70 year old white male as CEO who developed his business experience in the monopoly of the phone industry.  Who's primary claim to fame was that after Judge Green tore AT&T apart to create competition he was able to put it back together - only after the marketplace for land-line phones had begun declining and  without growth businesses like mobile data. 

As the ABC article notes, Mr. Whitacre sees his role running GM as "a public service... I think this company is good for America. I think America needs this."  Just the kind of enthusiasm we all like to hear from a turnaround CEO. 

GM needs to get aggressive about change if it is going to survive in a flat auto business with global competitors.  The company has no clear view of how it will be part of a different future, nor any keen insight to competitors.  It is floundering to manage its historical products and distribution, with no insight as to how it will outmaneuver tough companies like Honda, Kia and Tata.  It has not attacked its outdated product line, nor its design cycle, nor its approach to manufacturing.  It has very little R&D, and is behind practically all competitors with innovations.  A caretaker is NOT what GM needs.

I blogged months ago that GM needed a leader who was ready to change the company.  Ready to adopt scenario planning, competitor obsession, Disruptions and White Space to drive industry change and give GM a fighting chance at competing in the future.  It's going to take a lot more than 4 test drive centers with internet access and latte machines to make GM competitive.  But given what the new Board did, putting Mr. Whitacre in the CEO role, the odds are between slim and none the right things will happen. 

To survive you have to BEAT the competition.  Read more about "The 10 ways to Beat the Competition" at BusinessInsider.com

Comments

[Dave]

Although I'm no fan of GM's, I do wonder what they're doing so right in China where they are, in fact, BEATING the competition.

Any thoughts?

http://money.cnn.com/2010/01/12/news/companies/gm_us_china_salesrace/index.htm

[Margaret Reynolds]

If you could have hand picked the leader of GM who would it be? If you were going to craft a viable vision for GE what would it include? Pls twitter about it. Would like to hear your thoughts.

[dean graziosi]

It is good to know about GM business..I think still GM is doing good in business.I came to know something new regarding GM from this post.I have also read those 10 ways to beat the competition.